Customs, Excise and Gold Tribunal - Bangalore
Natvar Parikh Industries Ltd. vs The Commissioner Of Customs on 5 May, 2006
Equivalent citations: 2006(109)ECC424, 2006ECR424(TRI.-BANGALORE)
JUDGMENT T.K. Jayaraman, Member (T)
1. This appeal has been filed against the Order-in-Original No. 20/2003 dated 31.12.2003 passed by the Commissioner of Customs, Visakhapatnam.
2. The impugned order has been passed consequent to remand to the original authority by the CEGAT in its Final Order No. 461/2003 dated 28.03.2003. The appellants M/s. Natvar Parikh Industries, Visakhapatnam are the Agents for the vessel MV George that arrived at Visakhapatnam on 05.03.1996. According to the Import General Manifest (IGM), the vessel was supposed to carry 3152 pieces of Baked Anodes weighing 3811.092 MT. When the goods were landed in the Visakhapatnam Port, Tally sheet was prepared. According to the Tally Sheet, there was short landing of 64 pieces. As regards the weight, it was actually 3860 MT, which is in fact more than the manifested weight by 48.908 MT. After four months, Out Turn Report was issued by the Porters. According to the Out-Turn Report, the shortage was 56 pieces. The matter was adjudicated by the original authority for levy of penalty under Section 116 of the Customs Act. The matter went up to the Tribunal and the Tribunal remanded the case to the original authority with the following observations:
(a) ... The matter is, therefore, required to be remanded back to the Commissioner for considering such other contemporaneous records which the appellant may like to produce if procured from their principals and thereafter determine the exact quantity of the goods which are found to be short landed. The penalty would thereafter be relatable to the quantities so determined and arrived at.
(b) While considering the material which the appellants shall produce before the adjudicator and the submissions they make, the Adjudicator will also have to follow the General Guidelines as laid down for this kind of cargo in the decision of the Bombay High Court in the case of Shah Wallace & Co Ltd. - and the fragile nature of the anodes.
Consequent to the above directions, the impugned order has been passed. The Commissioner has imposed a penalty of Rs. 11,67,000/- under Section 116 of the Customs Act, 1962 on the appellants. The appellants strongly challenge the findings of the Adjudicating Authority.
3. Shri S. Raghunathan, the learned Advocate, appeared for the appellants and Shri K. Sambi Reddy, the learned JDR, for the Revenue.
4. The learned Advocate made the following submissions:
(i) The Adjudicating Authority has exceeded the scope of the remand order. He has relied on documents that have not been furnished by the appellants and copies of which have not even been furnished to the appellants.
(ii) The Adjudicating Authority erred in placing reliance on the Survey Report issued by SGS India Ltd. The said report is not binding on the appellant, as the appellant is not a party to the same and no notice prior to the survey being conducted was issued to the appellant. The appellant did not have the benefit of even perusing a copy of the same. The Adjudicating Authority, based on such report, has concluded that at the time of landing of the cargo, there was a shortage.
(iii) The Tally sheets issued by the Port Trust reflects that the entire cargo of anodes has been discharged from the vessels to the shore.
(iv) The Adjudicating Authority erred in concluding that as per the Bills of Lading, each bundle consisted of two pieces of anodes while in actual fact, the Bills of Lading do not reflect so.
(v) The Adjudicating Authority failed to appreciate the contention of the appellant that there was no uniformity of weight for each anode, which would be evident from the tally sheet. The Adjudicating Authority erred in taking the average weight as 1.209 MT for each anode by merely dividing the gross weight by the number of pieces reflected in the Bill of Lading.
(vi) The Adjudicating Authority erred in holding that the vessel had short landed 56 numbers of Baked Anodes and further erred in imposing a penalty of Rs. 11,67,000/- under Section 116 of the Customs Act.
(vii) The Out Turn statement of the Visakhpatnam Port Trust, on the basis of which the Show Cause Notice was issued, was not a contemporaneous record of discharge of cargo and the same was issued over four months after completion of discharge. There is every possibility of loss or pilferage of cargo between the time of discharge of the cargo from the vessel until the cargo was cleared by the consignees.
(viii) The Adjudicating Authority failed to appreciate that even according to the tally receipts, in terms of weight, the vessel had discharged cargo in excess of the manifested quantity.
(ix) The learned Advocate relied on the decision of the Calcutta High Court in the case of Mackinnon Mackenzie & Co. Ltd. v. Collector of Customs (Appeals) wherein it is held that penalty being penal, all relevant evidence should be considered by the Customs authorities and is not imposable mechanically merely on the basis of difference in measurement given in bill of lading and in customs survey report. Further, he cited CEGAT's decision in Tata Engineering & Locomotive Co. Ltd. v. Collector of Customs wherein it is held that penalty is not imposable unless one acted dishonestly or contumaciously or with deliberate or distinct object of breach of law. Further reliance was placed on this bench's decision in the case of Bata India Ltd. v. CCE, Bangalore wherein it is held that contumacious conduct or conscious disregard of duty is essential for imposition of penalty. Mere failure to carry out statutory obligation is not enough.
5. The learned SDR said that the Commissioner has clearly brought out that short landing has been established. Due to some mistake, the weight indicated in the Tally Sheet is more than the manifested quantity. The appellant is the Steamer Agent for the vessel and they are responsible for the safe discharge of all the cargo manifested. Otherwise, they are liable for penalty under Section 116 of the Customs Act upto twice the duty on the shot landed goods. Reliance was placed on the Tribunal's decision in the case of Garuda Pattabhiramayya & Co. v. Addl. Collector of Customs wherein it is held that Tally Sheet is an authenticated document which has to be relied on. Where there is a discrepancy between the Tally Sheet and Out Turn Report, Out Turn Report would become superfluous. Further, he relied on the decision of the Bombay High Court in the case of South East Asia Shipping Co. Ltd. v. Deputy Collector of Customs , wherein it is held that when Tally Sheets show unloading of entire cargo, Out Turn Report of Port Trust Authorities is not relevant. He cited a decision of the Apex Court in the case of British Airways PLC. v. Union of India wherein it is held that the process of unloading is completed only when cargo is handed over to the custodian and each packet accounted to airway bill in conformity with cargo manifest, hence, till such time cargo is under the possession and control of carrier airlines, only the 'person in charge' of the aircraft and not the custodian responsible for keeping safety of the goods and to account for any loss. Further, he stated that the Tribunal in the case of P & O Nedlloyd (India) Ltd. v. CC, Chennai 2002 (148) ELT 1206(Tri.-Chennai) has held that Steamer Agents were responsible for the shortages noticed and duty liability cannot be fastened on the custodian of the goods.
6. We have gone through the records of the case carefully. In this case, the Tally Sheets indicate that the weight of the goods landed is much more than the manifested quantity. However, with regard to the number of pieces, there is a shortage. The Out Turn Report also indicates shortage with reference to the number of pieces. The Commissioner has given a finding that on account of taking wrong weight of pieces, the Tally Sheet shows more weight than what is manifested in the IGM. He has arrived at a finding that if this error is ignored, and the number of pieces handed over by the appellant to the importer is taken into account, there will not be any discrepancy between the Tally Sheet and the Out Turn Report. Therefore, he held that the appellants being Steamer Agents are liable for penalty under Section 116 of the Customs Act, 1962. Hence, he has imposed a penalty of Rs. 11,67,813/- being the duty on the short landed goods. It has further been stated that the importers have claimed the refund of duty on the short landed goods, as initially, they paid duty on the entire manifested quantity. The reasoning of the Commissioner for establishing the short landing of 56 pieces is outlined in para 17.1 of the OIO and the same is reproduced below:
17.1 The party cannot deny the short landing of cargo since both the tally sheets and the Out Turn Report indicate that short landing of cargo has indeed occurred. The fact of the tally sheets being statutory documents is indisputable. The evidence was never questioned by the adjudicating authority even in the initial order. The tally sheets are taken at the time of actual discharge of the cargo and in this case they indicated a short landing of 64 pieces. The Steamer Agents themselves admitted that they were delivered 8 pieces over and above the tally sheet quantity. Thus the actual short landing as per tally sheet also works out to 56 pieces. The discrepancy in weight recorded while tallying is due to the fact that the weight of a piece was taken as 1.25 MT by the Port Trust while as per BL it was only 1.209MT. This is a clear error and the argument of the Steamer Agents on the basis of this error that there is an excess quantity merits rejection.
The above finding of the Commissioner is well reasoned for establishing the shortage of 56 pieces. He has also satisfactorily explained the excess weight of goods landed shown in the Tally Sheets. The reason is the Tally Clerk has taken the weight of the piece as 1.25 MT whereas what is shown in the Bill of Lading is only 1.209 MT. Therefore, the contention of the learned Advocate that there is no short landing at all is not correct. Once, the short landing is established, the Steamer Agent is liable to penalty unless the deficiency is accounted for satisfactorily in terms of Section 116 of the Customs Act. There is no need that there should be mens rea for imposing penalty under Section 116. A failure to unload the entire manifested quantity of goods attracts penalty upto twice the amount of duty. It is also seen that the importers had claimed refund of the duty paid on the short landed goods. If all these factors are taken into account, the imposition of penalty under Section 116 is in order. Hence, we uphold the Order-in-Original and dismiss the Party's appeal.
(Pronounced in open Court on 5 MAY 2006)